8. Late retirement
Your Normal Pension Age is the date that your pension benefits can be paid without reductions. Normal Pension Age is different for everyone, but for most people it will be the same as your State Pension Age. Your Normal Pension Age is shown on your annual benefit statements. You can access your annual benefit statements by logging into your ‘my pension online’ account.
You don’t have to retire and take your pension once you reach your Normal Pension Age. You can continue to pay into the LGPS and build up pension benefits in the scheme until age 75. Even if you stop working, you can defer putting your pension in payment until this date.
Once you reach age 75, you must put your pension benefits into payment, even if you continue to work. We will contact you to arrange payment of your pension benefits.
Late retirement increases
If you take your pension later than your Normal Pension Age, the pension you have built up will receive an increase as it is being paid later. Up until 31 August 2019, the increase is calculated as 0.010% for each day after your Normal Pension Age.
On 1 September 2019, government guidance changed, and late retirement increases on annual pensions after this date, are now calculated using the table below.
|Number of years after Normal Pension Age||Pension increase (%)|
The pension increase percentage is the amount applied per day after your Normal Pension Age.
Late retirement increases example
Late retirement increases can be a little complicated to work out.
Here is an example to show you how these increases are calculated. Mark’s Normal Pension Age is 65. He turned 65 on 1 September 2019. If he chose not to retire until 31 August 2023, that would be 4 years after his Normal Pension Age.
The table shows how increases would be applied to each period after his Normal Pension Age until his retirement date.
|Period||Years late||Total days||Increase percentage (%)|
|1 September 2019 to 31 August 2020||1||366||0.010%|
|1 September 2020 to 31 August 2021||2||365||0.010%|
|1 September 2021 to 31 August 2022||3||365||0.011%|
|1 September 2022 to 31 August 2023||4||365||
We would then add the percentages together to get a total percentage increase
(366 x 0.010%) + (365 x 0.010%) + (365 x 0.011%) + (365 x 0.012%) = 15.705%.
Let’s say Mark’s annual pension was valued at £5,000. This means his total annual pension when he retires, including late retirement increases, would be £5,785.25.
Increases on Lump Sum Retirement Grants
If you were in the scheme before 1 April 2008, you'll have an automatic lump sum retirement grant included in your benefits. This is a tax-free lump sum that usually cannot be converted into an annual pension.
The lump sum retirement grant will receive an increase of 0.001% for each day after your Normal Pension Age.
For example, if your retirement grant is £4,000 and you took your pension 386 days after your Normal Pension Age, we could calculate the increase as follows:
£4,000 x (0.001 x 386 days) = £15.44.
The total retirement grant paid would therefore be £4,015.44.
Last updated: 19 May 2021